Highlight

On 31 March 2023, law no. 19 of 2023, regarding the legalisation of unlicensed industrial facilities (the “Law”), has entered into force, authorising the Industrial Development Authority (the “IDA”) to grant a temporary operational license to the unlicensed industrial facilities.

On a related front, on 9 May 2023, the Ministry of Trade and Industry (the “MTI”) issued notable decree no. 149 of 2023 (the “Decree”), which entered into force on 29 May 2023. The Decree governs the rules and procedures for granting the temporary operational license to unlicensed industrial facilities, such as the request submission, required documents, timeline for operational license issuance, and the obligations of the concerned industrial facilities.

Authorised Industrial Facilities and Scope of Application

The industrial facilities already incorporated and/or existing when the Law entered into force are subject to the provisions of the Law and the Decree. However, the heavy industries sector and the listed industries under Cabinet Decree No. 47 of 2020 concerning the rules, requirements, and procedures for issuing licenses for heavy industries and others to the investorsare not subject to the Law and the Decree provisions.

The Decree has a temporary scope of application as IDA is entitled to issue such temporary operational license within a maximum period of 3 (three) years as of 31 March 2023.

Term of the Operational License and Compliance Period

The IDA is entitled to grant a 1 (one) year temporary operational license to unlicensed industrial facilities. This period could be extended for an additional 2 (two) years as per the MTI’s approval upon the IDA proposal and/or recommendation.

In this regard, the concerned industrial facilities shall legalise the industrial facilities within the period of the temporary operational license in accordance with the provisions of the Law No. 15 of 2017 regarding the simplification of industrial licensing procedures and the rules and procedures issued by the MTI.

Essential Procedures for Obtaining the Temporary Operational License

To obtain the temporary operational license, the concerned industrial facilities shall undertake the following procedures:

1. Submit a request to the IDA to obtain a temporary operational license as well as the following documents (the original of said documents should be available for seen verification purposes):
   1. possession title of the land or the entity (ownership/sale agreement, lease agreement, usufruct agreement) where the activity is carried out; and
   2. a copy of the commercial register of the entity (if available).
2. Submit a declaration that the industrial facility complies with all the environmental and civil requirements and all the regulations and/or controls in this regard.
3. Submit a declaration to rectify the status of the industrial facility to comply with the provisions of Law No. 15 of 2017 and its executive regulations, as well as all the issued decrees implementation thereof, within the period of the temporary operational license.

It is worth noting that the IDA shall be entitled at its discretion to inspect the location where the activity is conducted and/or the industrial facility location before the temporary operational license issuance, provided that the inspection should be within a maximum period of one week of the requested submission.

Further, it is worth highlighting that the Decree provides a quick procedure for issuing the temporary operational license within only 3 (three) working days from submitting all the required documents and declarations or as of the inspection date.

Moreover, the temporary operational license shall not grant the industrial license any legal status against third parties or any right to obtain the operating permit unless all the requirements to undertake the activity are met or fulfilled.

Obligations of the Authorised Industrial Facilities

The authorised industrial facilities shall undertake the required procedures to rectify their status and fulfil the requirements to obtain the operational license before the end of the temporary operational license term. Additionally, the authorised industrial facilities can seek the assistance of an accredited office registered with the Engineers Syndicate and licensed by IDA in this regard.

Further, the authorised industrial facilities shall submit a quarterly report to the IDA, providing all the undertaken procedures for the rectification of their status as well as all the obstacles in this regard.